In the emerging universe of small local news startups, achieving sustainability is proving for most to be a very long climb up a very tall mountain and no one has really reached the top.

Nowhere is this more evident than in New Jersey, with its proliferation of local independent online news organizations. New Jersey is a bit of an outlier – I have not seen other states with quite so many startups. Of about 350 sites in my Michele’s List database, 40 are in the Garden State, the most of any state. (California has 34 and New York has 32.)

It may reflect the number of distinct towns in the New Jersey – smaller towns with their own strong local identities that potentially have enough population and economic base to support their own site. It also reflects the presence of numerous sites in the TAP Into network of independently operated franchise outlets.

Unique as New Jersey may be, it offers a great testing ground for experimentation, and a potential blueprint for how a local foundation can foster innovation in community news.

The Geraldine R. Dodge Foundation, with an assist from the Knight Community Information Challenge, has been working for a year to help six local news sites become more sustainable while learning what it might take to help others. Now, the Dodge foundation has released a report, “Lessons from the Local News Lab,” (pdf) on what it has learned during the year.

The good news is that all six sites have seen increases in key metrics and most have increased revenue and developed at least one new revenue stream, according to the report by Molly de Aguiar and Josh Stearns, who are leading the Local News Lab initiative at the Dodge Foundation.

Revenue initiatives included a loyalty program, crowd funding campaigns, video ads and views, an Instagram campaign that led to a $20,000 partnership with a local marketing company, and events. (If you are a publisher, it is well worth diving into the full report and links for details.)

Dodge gave each site a $5,000 grant to support their experiments. But I think the project's approach to coaching and training may have had the most significant impact – I’ve seen this many times before as we have developed our own training programs for newsroom leaders, news entrepreneurs and community foundation leaders at Knight Digital Media Center.

The report describes the role that Stearns played as Dodge’s sustainability director and main point of contact with the sites.

"Having a person dedicated to assessing the strengths of the newsrooms and the needs of the communities to help develop and test new revenue streams helped give sites the space and information they needed to diversify their business model," the report said.

Stearns functioned as a business coach to the publishers and a sounding board for their ideas – “checking assumptions and nudging people towards goals – was important to keep innovation and experimentation on the front burner.”

He also researched tools and strategies that would be useful to the sites and connected them to larger networks of sites with similar goals as well as publications covering developments in the field. On occasion, Stearns jumped in and helped out on the side with tasks like designing an ad sales kit or writing language for a crowd funding campaign.

The work also included a focus on advertising, including a two-day sales academy at Montclair State University’s Center for Cooperative Media, following by eight weeks of coaching.

Overall, this is a much more activist approach than we often see from foundations that make grants but don’t get directly involved. I think it’s a very promising approach, especially in making sure that the lessons learned are recorded and widely disseminated.

The Dodge report offers a rich list of ways foundations can depart from traditional practices to spur innovation and sustainability in local news. Three in particular resonated with me:

• Fund infrastructure, not content. I’ve been arguing for six years that more foundation funding should go to build the capacity of organizations, especially on the revenue development side, rather than funding content or operations.
• Support emerging for-profit news startups as well as the nonprofits. The challenges they face are not all that different, and I think many small for-profit sites will prove the only alternative in many communities that simply don’t have a local philanthropic base.
• Provide much more than money. Happily, Dodge is writing the textbook on that.

Part 2: Community engagement tips from New Jersey's Local News Lab